Developers collect federal tax breaks, pour money into defeating Amendment 4
Amendment 4, the proposed state constitution amendment that would have voters giving final approval to changes to city and county comprehensive land use plans, is opposed primarily by developers, the lobbyists who represent them and the city and county governments who would lose final say over these plans if the amendment passes. But mainly, it’s the developers.
With voters able to approve changes to comprehensive land use plans, that Wal-Mart that would bring in piles of tax dollars but would be loathed by the community will never see the light of day. This, perhaps, explains why Wal-Mart has given $100,000 to the No on 4 campaign, a donation that hardly makes the big-box store unique among its peers.
But it’s the people who build those stores — along with everything else — who have the most to lose. That’s why the largest new home builder in the nation, Pulte Homes, has given the No on 4 campaign more than half a million dollars in 2010, and why the country’s second-largest home builder, Florida’s Lennar Homes, has contributed $367,000.
How are these construction companies, hit hard by the housing bubble burst, so flush with cash? The money flowing to No on 4 is there in part thanks to an underreported clause in one of Congress’ many extensions of unemployment benefits in the past year.
“About $2 million of the recent donations to the No on 4 campaign came from bailed-out construction companies,” says Lesley Blackner, president of Hometown Democracy, the organization that has fought to put Amendment 4 on the ballot for the past seven years. No on 4 has raised $11 million total since 2007, Hometown Democracy $2 million since 2003. No on 4 representatives did not respond to a request for comment on this article.
“This is all about the people who destroyed our economy, drove it over a cliff with reckless speculation,” Blackner says. “They were rewarded for their stupidity and arrogance by the United States government, and now they’re using that money to make sure they maintain the status quo because it works for them. Right now, they can go out into a community and all they need to do it persuade three out of five commissioners to get what they want.”
The Worker, Homeowner and Business Assistance Act of 2009, signed by President Barack Obama in the first week of November 2009, extended unemployment benefits for 20 weeks and pushed back the deadline for the first-time homebuyers’ tax credit of $8,000 through April.
The law also bailed out large corporations to the tune of more than $30 billion. That’s because of a so-called “look-back” provision. Previously, small businesses had been allowed to offset losses by getting taxes back from up to two profitable years. But under the new law, this look-back provision was opened up to the largest businesses and extended up to five years. Thus, massive construction companies that paid heavy taxes on their overbuilt assets at the height of the bubble were able to get those taxes back after the bubble burst.
And now those same companies are contributing hundreds of thousands of dollars to the No on 4 campaign to make sure that overbuilding and speculation can continue unabated in Florida, the site of some of the most egregious errors in housing development.
So Pulte Homes needn’t worry over the half million it contributed to No on 4. After all, its tax break under the Worker, Homeowner and Business Assistance Act amounted to $800 million. Lennar Homes didn’t strike it quite so rich; it only received $250 million. What’s more, contrary to the aforementioned notion that these companies should be cash-barren after the housing bubble, that simply isn’t the case. In its last financial statement, Pulte Homes boasted more than $1 billion in cash on hand. The $800 million tax look-back not only rewarded bad behavior, it actually bailed out an industry that didn’t need bailing.
“It’s disgusting,” Blackner says. “I can understand why people are losing faith in their government.”